What is the Ambi-Dextrous Organisation?

Innovation, renewal, regeneration, disruptive technologies and the high rate of business start-ups leave some established businesses floundering.  Saddled with high levels of assets, cumbersome supply chains and the need for rising quarterly earnings can make innovation difficult.

In my experience, few large businesses are good at both ‘driving business as usual’ alongside the ‘creation of a new order’ of things. Big Research and Development centres separated out from the day-to-day business have served some industries well, but in recent years even they are struggling to complete with the more nimble start-ups.

The nimble start-up and the established corporation have two quite different cultures and mind-sets that drive the existing and the new. The challenge for the big corporate is that you have both a past and a current to maintain; the start-up has neither, just a future.

 

We can characterise these two different cultures as:

Quality
Innovation
Creativity
Deviance
Agility
Ambiguity

Vs

Order
Control
Conformance
Systems
Processes
Costs
Delivery

Over the past 50 years, there have been lots of ways in which these different cultures have been described.  In the 1960s Douglas McGregor (1) came up with two theories of motivation, Theory X and Theory Y, Henry Mintzberg (2) talked about the Bureaucratic and Non-Bureaucratic, other management thinkers talked about the Organic and the Mechanistic organisational structures (3). But the implication was that you were either one or the other – otherwise you become ‘stuck in the middle’.

Our challenge now is that we need both, the ambi-dextrous organisation that can work with right and left, creative and mass productive. The eastern idea of Yin and Yang gets closer to the idea. Two sets of ideas that interact and bounce off one another.  In the tension between the two a balance is found; so too with organisations.  There is a growing need for businesses to manage both – this is what we call at OE Cam the ‘ambi-dextrous organisation’.

 

The Tension Between Innovation and Productivity

Let’s take two strong examples:  Apple and Google.  Apple is running a huge supply chain that delivered 75.5m iPhone’s in the first quarter of 2015.  Google is running the world’s leading search engine with an average of 5.7 billion searches per day in 2014. Alongside this massively productive supply chain both are innovating and have created organisations where radical new products and services are created; some succeed, many fail.

 

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the ambi-dextrous organisation that can work with right and left, creative and mass productive.  The eastern idea of Yin and Yang gets closer to the idea.  Two sets of ideas that interact and bounce off one another.  In the tension between the two a balance is found.”

 

Many businesses recognise this tension and so have physically and organisationally separated research and development or innovation away from supply chain and sales.  In this way, to some extent, the two can develop different mind-sets and cultures.  Too often though, the two have been governed by a similar regime of controls, measures and regulations that has created a monolith.  The tension of living with different ways of working alongside one another is often too great and the overwhelming influence of order and governance squeezes out some of the creative juices.

Some have spun out their innovation into entirely separate companies, others have created innovation ‘incubators’ that protect fledgling innovations from the deadening embrace of policy, process and procedure. Some separation is inevitable, but the total separation option doesn’t work so well for many –  innovation and change have to work alongside the need to deliver a consistent product and service.

The tension between innovation and productivity plays out over time. Table 1.0 shows how the organisation dynamic changes with the business dynamic. Today’s innovation where the customer is still ‘in awe’ is a quite different dynamic than the one where the product or service has become mature.

Creating Greater Ambi-Dexterity

Creating a more ambi-dextrous organisation is multi-dimensional.  It starts with the people but it requires the organisation values and mind-set to change.

There are four dimensions to the creation of the ambi-dextrous organisation:

1. Leading
2. Changing mind-sets
3. Organising
4. Performing.

 

Leading

The challenge of leading the ambi-dextrous organisation is that the strong theme of ‘sameness’, that underpins so much leadership, needs to be questioned. Corporate centres exist to give direction and governance. But such governance can too easily become overwhelming. It is deeply ingrained in our psyches that order and efficiency are two implicit goals.  Why do things twice when we can do it once?  What is good for division A must be good for division B!  Governance becomes detailed regulation and control.

We all have a tendency to want to order and control on the basis that this will give us predictable results. But ambi-dextrous leadership is more Darwinian than this.  It is creating the most positive ecology from which good ideas will grow and develop.  It’s living with a basket of probabilities rather than a series of certainties. This leadership needs to be embraced together with the rigours of the current revenue generator of the business.  For the leaders it is a shift away from what is being done, the tasks, the activities to a greater focus on future outcomes and the capabilities to create them. Leadership becomes more distributed within a framework of goals, values and capabilities.

Leaders need to work with multiple ways of working.  These will contradict and challenge one another and the pressures for order and regulation will arise as a result. This is not easy. We like our businesses to be ordered, it helps us understand them, but the leader of the ambi-dextrous business is managing a portfolio of assets, people and projects that combine flexibly to meet the work demands.

 

Changing Mind-sets

Ambi-dextrous organisations require leaders to think differently.  Let’s look at jobs, network thinking, centres and ambiguity.

 

Jobs

People in established organisations tend to see that they have a ‘job’.  A ‘job’ is something that is more or less defined and is configured as a bundle of tasks. We reinforce this idea through job descriptions, grading plans and a physical workspace. We talk about what is my job and what isn’t.  In contrast, Google work is seen more as an individual’s ability to contribute to the business. My ‘job’ becomes a bundle of capabilities and experiences that I apply over time in lots of different ways.  My day-to-day work is the application of my capabilities and experience.

 

Network thinking

A second example is what some call the shift from institutional thinking to ‘network thinking’. Institutional thinking is necessarily closed, selective and controlling. Network thinking is open, random and supportive. Google’s hiring practice starts with peer interviews and it is only once a candidate’s potential peers are convinced that this person can add capability and performance to the team, does the hierarchy get involved. The professional network has to see the candidates capabilities to add real value before the hierarchy is employed to make the hire.

 

Centres

A third example of the mind-set change is the role of corporate ‘centres’.  We have been through a strong period where many have promoted gigantism, why do anything twice when you can do it just once (in the same way, on the same system with the same rigidities and inflexibilities). The mind-set was synergy, efficiency and control. But in this new world the business centres will need to get better at working with portfolios of units with different demands and requirements.  Some will benefit from synergy, but others will need to be left to get on with a risky venture with a different form of support.  Celebration of difference and diversity comes from the openness and randomness of network thinking.

 

Ambiguity

For the individual leader there is more ambiguity and more stress in the ambi-dextrous world.  We need to be better able to hold different, often opposing business models with different mind-sets and different ways of working in our minds at any one time. The ability to manage this ambiguity with its resulting anxiety is precious.

The ambi-dextrous business is organised in a different way.  We need to work more consciously with both the hierarchical and the lateral or networked.

The force of the hierarchical is lessening as communications become more networked to the lateral. Shifting from defined boundaries to peer-group networks that use social communication to keep in touch and work on projects from wherever they are based in the world.

Dr John Kotter in his new book “XLR8” (or Accelerate) points to networks and peer groups becoming ever more influential as Generation Z see hierarchical power and structure less of a force to take notice of (4). Gerald Fairtlough (5) talks about the ‘heterarchy’ – where hierarchy and the lateral coexist.  Increasingly, horizontal power is the better way to get work done.  My colleague Gary Ashton picks up on this theme in his article which talks about the impact and effectiveness of the hierarchy lessening and the power of peer groups, networks and communities of interests increasing.

OE Cam’s recent research (6) with our European partners demonstrates the growing importance of autonomous teams.  Leadership is distributed and capabilities are sought from wherever in the business to deliver the required result.

In the meantime conventional organisations are becoming challenged. Hierarchies are becoming increasingly less effective – even in running ‘business as usual’.

 

Performing

Dan Pink’s video on rewards and incentives demonstrates an uncomfortable truth: most conventional incentives don’t work ! (7). Worse still, they may even achieve lower levels of performance.

Where ‘smart creatives’ are involved, the conventional approach to measuring and managing performance breaks down.  In Apple, Google and Netflix (8) the performance focus is on building the very best capability.  They focus on the outcome and delivery rather than on the how or tasks –  those old measures of effort that many performance management systems are based on are actually counter-productive.  Conventional job and pay mechanisms keep conformity and rigidity and reinforce institutional thinking.  Notions of fairness have driven out difference.  Performance management moves to focus on capability and its application and away from task delivery and individual measures.

 

Conclusion

The business and its context will determine the extent to which the ambi-dextrous organisation is for you. For many, the changes I describe are already impacting the way you lead your businesses. The ambi-dextrous organisation will enable your business to be more creative and innovative whist delivering today’s sales and services.

Finally, there are some good new books around.  All well worth a read to explore further the world of ambidexterity.

  • ‘Accelerate’ (XLR8) by John P Kotter (2014) Harvard Business Review Press
  • ‘How Google Works’ by Eric Schmidt (2015) John Murray Publishing
  • ‘Flex: The New Playbook for Managing Across Differences’ by Jane Hyun and Audrey S Lee (2014) HarperBusiness
  • ‘The Three Ways of Getting Things Done’ by Gerald Fairtlough (2005) Triarchy Press
  • ‘The Design of Business: Why Design Thinking is the Next Competitive Advantage’ by Roger Martin (2009) Harvard Business Review Press
  • ‘Drive: The Surprising Truth About What Motivates Us’ by Daniel H Pink (2011) Canongate Books Ltd.

 

 

mark.goodridge@oecam.com

 

1. Douglas McGregor ‘The Human Side of Enterprise’ (1960) McGraw Hill
2. Henry Mintzberg ‘Structure in Fives: Designing Effective Organisations (1992) Prentice Hall
3. Tom Burns and George Stalker ‘The Management of Innovation’ (1961) Tavistock
4. ‘Accelerate’ (XLR8) by John P Kotter (2014) Harvard Business Review Press
5. ‘The Three Ways of Getting Things Done’ by Gerald Fairtlough (2005) Triarchy Press
6. ‘Autonomous Teams 2015’ Research conducted by OE Cam and Allied Consultants Europe (February 2015)
7. Dan Pink ‘The Puzzle of Motivation’ (2009) TEDTalks
8. ‘Netflix Culture: Freedom & Responsibility’ (2009) See Netflix SlideShare